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CareCredit: The Easy Way Billionaire Banks Fill Cavities in Their Profits

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Fact check: DentalBuzz first wrote about CareCredit in 2008, our very first year online. At the time, subprime lending was steering the nation into a deep recession. Regulators eventually closed many of those loopholes, but when it comes to medical lending, the risks have only grown worse.

Della thought she was just getting a tooth pulled. She left the office with a numb jaw, a $1,000 charge, and a brand-new CareCredit account she never asked for.

David went in for a cleaning. Weeks later, a Synchrony Bank credit card showed up in his mailbox with $1,000 already billed to it.

Victoria didn’t even get her teeth fixed, but somehow still got sued for thousands when a dentist’s office charged her CareCredit account without her knowing.

These aren’t outliers. They’re the blueprint. And if you’ve ever been in a dental chair with a clipboard on your lap, you know exactly how easy it is to sign away more than enamel.

How the Scam Gets in the Chair

Medical credit cards like CareCredit market themselves as patient-friendly: “No interest! Easy payments!” But behind the bright colors and soft music is a trap.

Here’s the magic trick: deferred interest. You’ll hear “zero interest” if you pay it off in six, twelve, or eighteen months. What you won’t hear is that if you slip up (even by a single penny), the bank retroactively slaps on 25–33% interest on the entire balance from day one.

So your $3,500 implant? Now it’s a $4,000+ landmine. And all you did wrong was believe your dentist’s assistant when she said “stress-free financing.”

Why Dentists Are Playing Banker

Let’s be fair: dentists aren’t rubbing their hands in the back office like cartoon villains. They’re dealing with slow, stingy insurance reimbursements. CareCredit offers them payment in two business days. Compared to weeks of haggling with insurance companies, it’s easy to see why dental teams say yes.

But for patients, this shortcut is a trapdoor. Signing financial contracts while you’re in pain, or even under anesthesia, is not informed consent. It’s duress with a signature line.

What’s Broken Here (Hint: It’s Not Just Teeth)

This problem is a symptom of a bigger disease: the U.S. healthcare system. Because dental insurance these days rarely covers more than $1500 per year per patient, lenders like Synchrony have found a back door into the exam room. Dental staff, who are trained through online modules, not by having finance degrees, are suddenly doubling as loan officers.

And let’s be clear: there should be no door in the dental office that opens to a bank.

For Patients: What you can do

  • Pause before you sign. Tell the staff you’ll take the paperwork home first.
  • Spot the red flags. If you hear “no interest,” immediately ask: Is it deferred interest?
  • Watch your credit. Patients often learn about CareCredit accounts only when the bill (or a lawsuit) arrives.
  • Know your rights. Some states are banning deferred-interest medical credit or requiring patients to fill out their own applications instead of letting staff do it.

For Dental Teams: A Gut Check

Patients come to you because they’re in pain, not because they need a crash course in consumer lending. If you wouldn’t hand an extraction patient a car loan in a vulnerable moment, why hand them a credit card app?

Remember: a patient who feels scammed won’t come back. And they’ll tell their friends, loudly. Synchrony might pay fast, but the long-term price is patient trust.

The Bite at the End

CareCredit works because insurance doesn’t. Dentistry should be a partnership in health, not a transaction in debt, and until the system changes, both patients and providers are caught in the same trap.

References & Further Reading

Consumer Reports: What, no bill’em?

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Unbiased reporting about the consumers themselves.

 

It may be hard to believe, but patients all over the country are complaining that dentists aren’t asking them to pay their bills anymore.

For many years, consumers have taken advantage of dental practices’ good will by just “paying when they could” for their dental care. Unfortunately for many offices, this resulted in the expenses of staff time, mailing repeated statements, and simply writing off debts that were never paid.

Now that healthcare financing has come to the market, Consumer Reports (July 2008 issue) is pointing fingers at CareCredit, the Citi Health Card, Chase HealthAdvance, CapitalOne Healthcare Finance, and the dental providers themselves for allegedly taking advantage of the doctor-patient relationship.

There is no excuse for dentists who purportedly sign patients up for these programs while sedated, or otherwise abuse their patient’s credit for personal gain. Consumer Reports makes it seem like the American Dental Association itself condones this type of behavior. The purpose of healthcare financing is to benefit patients, dentists, and the participating banks. The article even affirms that the lenders take anywhere from 4.5% to 13.9% of the fees that are financed through their credit cards, which is much, much higher than traditional credit cards. Dentists pay these fees in order to give patients access to interest-free payments.

Most patients do pay off their balances within the interest-free period. Those 20 percent who do not were originally the kind that were most likely to show up in the dentists’ accounts-receivable column at the end of the year. Only now it is the banks who have accepted the burden, and because contracts are involved, so are consequences.

Is it really the dental equivalent of subprime mortgages?

Consumer Reports seems to think so. While not exactly an adjustable-rate mortgage, the default retroactive APR of 22.9% when a balance isn’t paid in full after 24 months is not news to anyone who reads the fine print on any typical credit card statement. The only money crisis in healthcare lending is that consumers are now being held accountable for their actions.

It is our culture that breeds the opinion that consumers deserve what they want, exactly when they want it, and it is this belief that is the underpinning of excessive consumer debt. Most patients want a perfect smile, but only the ones who don’t have the self-discipline to know whether or not they can even afford the payments are the ones getting snagged by the banks.

In defense of Consumer Reports, however, it does appear that some of the terms of the loan agreements are difficult to stomach, and it is agreed that some reform here would be beneficial to everyone involved.

Many consumers believe that teeth are more of a luxury than a life-and-death issue. Affirming this is the prosperity of quality dental practices which do not rely on insurance payments for their livelihood. And the bottom-line truth is that edentulism is not a risk factor for any other diseases, so it is not a liability to the overall health of a patient.

Dental insurance is a form of consumer entitlement, and healthcare financing is one strong step away from this dependency and expectation. Insurance justifies the acceptability of mediocre dentistry to the consumer. Perhaps the reality is that every dentist should move towards the model of providing excellent dental care at fees that will keep them in business, without taking advantage of those patients who need much more than just a good set of chompers in their lives.

What’s next?

Our prediction: haircare financing.

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